Shell has called a time out on its Arctic drilling plans and will suspend operations this year. Problems such as the drilling rig that ran aground (above) have convinced the oil giant to go back to the drawings boards for awhile. The news immediately stoked up the opposition again, which claimed that hunting oil in the Polar Regions is too dangerous. The British are having their own problems with North Sea drilling and output has been disrupted this year as well. Ironically, Shell now says it likes the possibilities of solar energy – two years after it exited its solar efforts.
The ARPA-E Convention became the farewell address for departing Secretary of Energy Steven Chu, who used the occasion to give one last pep talk on energy innovation. Chu cited many past predictions that proved to be wrong, including a British post office official’s rejection of the telephone because “we have plenty of messenger boys.” Chu has played a key role in the creation of the government’s energy innovation effort.
Not to be outdone, T. Boone Pickens also addressed the Department of Energy-sponsored gathering and outlined his new plan for substituting natural gas for gasoline in cars. Pickens wants to remove a tax policy that now favors diesel and also says we should draw down the Strategic Petroleum Reserve, saying it is not outdated. The Texas oilman is confident American oil and gas production can carry the day. It probably could – if all of America were Texas.
Japan’s new Prime Minister Shinzo Abe announced the country will restart some of its idled nuclear reactors. His government was elected with that policy out in the open so it will probably happen. Taiwan voters will be given the chance to decide whether the island nation should complete a fourth nuclear reactor that has been under construction since 1992. And people think it takes the US a long time to finish a reactor! The Bulgarian Parliament has rejected its voters decision last month, however, and has decided to scrap plans to build a Russian reactor at Belene. Voters approved the project by 60 percent but the conservative-controlled government says low voter turnout voided the referendum.
The solar sector is in a funk as solar stocks are falling even as the market reaches new highs. First Solar announced a record conversion rate of 18.7 percent with its cadmium-telluride cell but its stock has plunged to a three-month low. Even Silicon Valley investors are getting a little sour on solar.
One reason may be that most of the world is waking up to the hard lesson of energy subsidies. Governments are finding they can’t afford them – or that the market distortions have too many negative consequences. Egypt, of all places, announced it will try to end fuel subsidies by 2016. Romania is scaling back and a big legal fight is looming in Spain over the government’s decision to make abrupt cuts. German greens are sounding the alarm that cutting subsidies may subvert their plans to phase out nuclear power. In Britain, on the other hand, the head of RWE is warning the government of saddling future ratepayers with too many costs by subsidizing nuclear. Someday, somewhere governments may learn to leave well enough alone. As a famous French economic minister once said, “Laissez faire.”